There’s an article in the Wall Street Journal about Rex Tillerson, ExxonMobil’s departing CEO and the man who Trump has picked for the role of Secretary of State. The whole article is worth reading, but this bit caught my eye:

Mr. Sechin came to like Mr. Tillerson because he was transparent and forceful in his communications—and was one of the few Western executives strong enough to push back against Mr. Sechin, said people familiar with the matter.

…

Mr. Putin, who had come to trust Mr. Tillerson as a man of his word, blessed the deal and said investment could eventually reach $500 billion.

…

“Over the years, I think we have earned each other’s respect,” Mr. Tillerson told students at an event in March 2015 at Texas Tech University. When Exxon says “yes,” he told them, the Russians would know that the company would “follow through on that yes. Your commitment means something. And so I think it’s the most important attribute.”

The first point to note is that the Russians respect those who push back against them. Anyone who has spent time among Russians would know this, and they would also know that Russians dislike sycophantic grovelling with a passion. This is a lesson that Shell seems determined not to learn. How many years is it since they caved in over Sakhalin II and have been waiting pathetically for another major project in Russia? It’s coming on a decade now.

Secondly, it appears that an oil executive being transparent in their communications and delivering on promises is a rarity in Russia. That speaks volumes about BP’s Bob Dudley who bungled the Arctic exploration deal with Rosneft by either not bothering to tell their AAR partners about it, or hoping Rosneft or the Russian government would pressure them into going along with it. It also says a lot about Total, who sold their stake in Kharyaga after spending years trying and failing to deliver the Phase 3 expansion. It also confirms what I said at the time of his death, that Christophe de Margerie’s enormous character and penchant for honest, direct talking made him genuinely popular among the Russian leadership.

It’s a bit of a damning statement all told, isn’t it? Except for Mr Tillerson, of course.

Similarly to what I did last year, now all the 2015 annual reports are out I thought it would be interesting to create tables showing revenues, profits, number of employees, and profit per employee for each of the majors.

ExxonMobil 2015

Despite the prolonged downturn, ExxonMobil is still doing very well as a company. True, revenues are down and profits halved but any company that can make north of $16bn clear profit in the biggest slump in a generation must be doing something right. They are still not shedding staff, probably because they were not bloated in the first place, and the average added value of each employee is still a very healthy $220k. Investors might be grumbling, but the company is doing very well in the circumstances.

Shell 2015

Shell are in the shit. Having seen their revenues reduced by almost 40%, they cut the headcount by a measly 1,000 people – just over 1% – as profits collapsed by 87%. With their purchase of BG for $70bn only adding to the problem, it could well be that the lumbering giant that is Shell is ill-suited for the industry of today and the future. Could Prelude FLNG, like the Spruce Goose, be the only one of such size ever built? All the talk of their rivaling ExxonMobil as the world’s No. 1 private oil company must seem like distant memories right now.

Total 2015

Total continue to surprise, actually increasing their profits since 2014 – the only major to do so. Their overall performance is still not very impressive, but they are at least keeping their heads above water. What their 96,000 employees do all day is anyone’s guess, but at least their numbers have been trimmed to the tune of 4% since last year. Let’s hope this hasn’t been achieved only by selling assets along with the workforce, or maintaining production is going to be a serious challenge in the near future.

BP 2015

BP’s management might want to consider quitting the oil business and find something that perhaps they’ll be good at. They are looking by far the most vulnerable major at the moment, and they need to turn things around in short order.

Chevron are being outperformed by Total, and if their revenues and profits don’t start to pick up they may have to shed yet more staff. To what extent their poor performance is down to the weak oil price or poor management remains to be seen.

‘The combination of Saft and Total will enable Saft to become the Group’s spearhead in electricity storage’, said Patrick Pouyanné, Chairman and CEO of Total. ‘The acquisition of Saft is part of Total’s ambition to accelerate its development in the fields of renewable energy and electricity, initiated in 2011 with the acquisition of SunPower. Saft’s renowned technological know-how and unique expertise have allowed it to develop innovative and competitive solutions for its clients. It will notably allow us to complement our portfolio with electricity storage solutions, a key component of the future growth of renewable energy. This transaction will also enable Saft, its management and employees to benefit from Total’s technical, industrial, commercial and financial support. In addition, this transaction will enable Saft to successfully accelerate its development.’

This is yet more evidence of Total’s stated goal of shifting away from oil and gas production, especially when considered alongside their announcement in February that they don’t intend to reach FID on any projects this year. Here’s what I reckon is happening.

The recent protests in France, which have brought most transport to a standstill and left filling stations empty due to the refinery workers having walked out, are over labour reforms which are pretty minor by the measure of most developed countries (albeit less -publicised proposals would severely hamper the unions’ ability to incite industry-wide unrest, and would allow companies to consult with all employees, not just the unionised ones). The CGT union is the main force behind the strikes, and seems to be a throwback to the days when the Soviet Union was still going strong and a good half of the world’s idiots thought Communism was a viable system of government. Yet despite the CGT representing a small minority of the French population, they appear to have plenty of support:

The survey carried out on Thursday and Friday showed that 54 percent of French people interviewed were against the protests. The same number backed the protests in May. Only 45 percent currently support the protest movement, BVA said.

The poll showed 29 percent wanted the government to maintain the bill, which aims to make hiring and firing easier, in an attempt to get stubbornly high unemployment falling, with presidential elections a year away. The same percentage want the bill withdrawn, while 41 percent want a negotiated solution.

45% of the population support the protests, while only 29% support the bill. Unless those figures are really <15% and >80%, France as a country is fucked. The issue here is fairly obvious: French people think the primary purpose of a company is to employ French people. The provision of a useful service may come in at a distant second, but it is likely to be a mystery to most of them that a company’s owners expect a return on their capital invested.

Total clearly understands that investors expect a return on their investment which is why they’ve pulled out all the stops to maintain the dividend. But they are also aware that the general public will not allow them to shed jobs, and so have refrained from engaging in the sort of axe-swinging carried out by the rest of the industry. At some point, unless oil prices rise far higher than anyone is expecting, maintaining these two positions simultaneously will become impossible and one of them will have to give. And Total being a French national champion, have a guess – in a choice between investors or unionised employees – which is going to be handed the shitty end of the stick. Uh-huh.

Patrick Pouyanne, being well-versed in French politics, is therefore attempting to position the company such that it is viewed as an integral part of a green, sustainable, responsible French societal landscape whereby what is good for Total is also good for France and the rest of the world. Then when the time comes for Total to beg the government for French taxpayers’ cash or state favours, as seemingly every other large French industry eventually does, it will be all the more easy to justify.

Patrick Pouyanne was first a politician, and later got parachuted into Total in a senior position. Bear in mind that he found himself CEO only because of Christophe de Margerie’s untimely death, and it’s not too hard to envisage a scenario whereby a centre-right government gains power in the elections next year and Pouyanne is made Minister of Energy. From there it’s simply a matter of throwing everything in the lap of a new CEO, bringing Total closer to the government bosom where jobs are protected, taxpayer cash is injected where required “for the good of France”, and the investors can go whistle.

Real-world stuff has kept me away from the keyboard for the past month or so. This will happen occasionally, but I have no intention of quitting the blog permanently. If I do I’ll let you know, so please do keep checking back.

While I was away ExxonMobil came under pressure from a minority of shareholders to adopt various climate change policies:

After a long battle to even get on the agenda for ExxonMobil’s 2016 Annual Meeting, the company’s shareholders on Wednesday voted against four initiatives to address climate change, even while the company is facing an investigation for its climate denial activities.

Investors were hoping to force Exxon to add a climate expert to its board, to enact a policy to avoid 2°C warming, to increase capital distributions (with the understanding that continued investment in assets likely to be stranded is not a good long-term strategy), and to report on the impact climate change policies worldwide to the company’s bottom line.

Each shareholder proposal failed.

“We know the path that Exxon is on, and the business strategy as it exists today, and as it existed for the last 50 years, is not a business strategy that is going to work in the 21st century,” Natasha Lamb, Arjuna Capital’s director of equity research and shareholder engagement, told ThinkProgress after the meeting. “It is not in line with a low carbon scenario where we limit the burning of fossil fuels.”

This is something I don’t quite understand. I remember years ago meeting a childless, middle-aged woman who worked as a freelance journalist in London complaining that England should be more like Germany and France in relation to social policy, labour laws, housing, foreign policy, approach to sex and alcohol, and a whole host of other criteria. She spent half her life campaigning on behalf of fringe political parties who she thought might bring this about. What I never understood is why she didn’t move to Germany or France. That’s not to say I think anyone who disagrees with aspects of a country and prefers how things are done elsewhere should be invited to move in the first instance. But if somebody wants to see wholesale changes such that their Country X becomes much more like Country Y, then why not simply move to Country Y?

I was reminded of this woman when I read the story of people – both investors and outsiders – clamouring for ExxonMobil to adopt various climate change policies. But we already have major oil companies doing just that: Shell and Total, to name two. They have already embraced the climate change narrative and are putting emissions at the centre of their corporate strategies, so why do those who are not happy with ExxonMobil’s strategy not simply sell their stock and invest in those majors who share their strategic vision?

I would have thought it would be better to have the majors pursuing several different strategies on climate change in order to spread risk and to properly ascertain which one turns out to be the most sensible. If, for example, government-induced emissions targets and other climate initiatives prove to be extremely expensive, unpopular, and ineffective then ExxonMobil’s stubborn insistence on producing oil and gas in the most cost-effective manner might turn out to be the best approach, with other majors left wondering why they bet everything on the promises of politicians. If people genuinely think ExxonMobil are pursuing a poor strategy, then switch to Total. Simple.

But I don’t think this has anything to do with investors’ concerns for the value of their stock. To me it looks more like a minority of activists wanting to browbeat ExxonMobil into conformity regardless of their financial performance, backed by larger groups (including politicians) who are concerned that ExxonMobil’s financial performance might outstrip those majors who have chosen to sink billions into what will probably be a highly expensive campaign of virtue-signalling and arse-licking. If they can force ExxonMobil to adopt the same strategy, it will be a lot harder to blame the resulting mess on specific policies.

In other words, the last thing the elites and the environmentalists want is to see a competition: they want to put an equally heavy millstone around everybody’s neck.

In what is becoming a regular occurrence in that company, Mexican state-owned oil company PEMEX experienced another deadly explosion, this time in one of its petrochemical plants:

Four more people have been found dead after last week’s explosion at a petrochemical plant in southeastern Mexico, raising the death toll to 32, state oil giant Pemex and Mexican plastic pipe maker Mexichem said in a joint statement on Sunday.

The vinyl petrochemical plant in the Gulf coast state of Veracruz is a joint venture between Pemex’s petrochemical unit and majority owner Mexichem.

Pemex’s CEO has said that last week’s blast was caused by a leak but he did not how the leak had happened exactly.

It was the latest in a series of fatal accidents at the company.

Mexicans continue to be happy to pay this steep price to keep the company from reforming and letting “imperialist” foreigners in. I wrote about the shambles that is PEMEX here.

Total’s Patrick Pouyanne once again takes time off from being CEO and confusing me over his company’s strategy to play blogger on LinkedIn, this time informing us which countries will be the key energy players in the future. Lord only knows why Pouyanne feels the need to write articles telling us what is widely known and is adequately covered by dozens of other energy-focussed websites, blogs, and publications, but then I’ve always suspected he isn’t entirely sure what a CEO’s job entails. Key quote:

While the profitability of offshore wind farms is still somewhat in question, notably because of the huge maintenance costs involved, onshore wind energy is now profitable without subsidies. Total has tested onshore wind power a few times in the past and intends to take a second look to see if this is an area in which it wants to invest.

So Total is shifting away from fossil fuels and seriously looking at wind farms. Let’s see how that works out. The following picture accompanies the article, no doubt to reinforce the point that Total takes diversity hiring very seriously:

14 women out of 25 people, 9 ethnic minorities, and 4 who look old enough to remember the last oil crash. How many of these, do you suppose, are diverse enough in opinions to speak out against management-driven stupidity?

This graph has been doing the rounds of social medial, comparing the crude oil production cost of various countries:

Those at the very top are probably okay because their economies are diverse enough to withstand a drop in oil production, although Norway might need to scale back its umpteen social welfare programs a bit. Those near the bottom are probably okay because oil isn’t likely to stay rock-bottom for very long. But those in the middle – particularly Angola and Nigeria – are pretty fucked. I don’t know whether this graph represents the technical cost of oil production, or whether it includes the additional costs that come with doing business in these sort of countries. In any case, these costs will almost certainly be under-represented in any calculation, and will likely only increase.

On Tuesday France’s Total presented a new organisation which purports to achieve its ambition of “becoming the responsible energy major”. I must confess, if I thought Total’s strategy was rather unclear before, it is doubly so now.

Total spent 2015 meeting the short-term goals set in response to the ongoing imbalances resulting from the fall in oil prices that began in June 2014.

Yet even as it addresses these immediate challenges, the Group must also prepare for the medium and longer term and work to strengthen its position as a global energy leader.

By carrying out its core business more efficiently? By emulating the practices of ExxonMobil, which is more successful an oil company on every measure which matters to an investor?

Apparently not:

Total’s ambition is to meet the energy needs of a growing world population, tackle climate change and provide solutions that match changing customer expectations.

Lofty goals do not a corporate strategy make. You’d never guess that Total’s CEO Patrick Pouyanne started his career in politics, would you?

Accordingly, as part of its “One Total” company project, on April 19, 2016 the Group presented a wide-ranging new organization plan to employee representatives.

Beware any company that launches a “One <Insert Company Name Here>” campaign: if unity within a company needs to be emphasised, things have likely already gotten pretty bad.

The reorganisation itself is made up of 3 parts:

1. Creation of the Gas, Renewables & Power Segment

Gas, Renewables & Power will spearhead Total’s ambitions in the electricity value chain by expanding in gas midstream and downstream, renewable energies and energy efficiency.

…

We intend to deploy a proactive strategy in gas markets to meet demand and identify new outlets for our production. We will also produce and sell power from renewable sources. Electricity will be the energy of the 21st century and the growth of gas and renewables is pushing us to take a value chain approach to electricity. We have multiple ambitions in renewables in 20 years’ time: be in the top three in solar power, expand in electricity trading and energy storage, be a leader in biofuels, especially biojet fuel, and consider potential development opportunities in other renewable energies.

So Total is going to shift its focus away from oil and gas production towards electricity generation. There are two reasons why I think this should concern an investor. Firstly, this sort of strategy should come about on its own merits, not as a result of a crash in the oil price. If this is a sensible strategy now, why was it not considered 2 years ago instead of “we need to produce 5m barrels per day” or whatever the figure (which was never met) was? This smacks of a company having underperformed at at its core business opening new product lines instead of fixing the underlying issues. Secondly, what makes Total think it can generate and trade electricity more efficiently and profitably than those who do this as a core business? Sure, there is a link with the gas production and Total has long been an investor in solar power, but the structure and nature of the company is hardly suited to activities which will almost certainly have fine margins. And this:

We intend to deploy a proactive strategy in gas markets to meet demand and identify new outlets for our production.

Ah, so Total is finally going to do what everyone else did a decade ago: offshore the support functions to somewhere cheaper than Central Paris. Oh wait, this is France:

No jobs will be lost and there will be no mandatory geographic relocation. Total is committed to conducting this project in close collaboration with employee representatives and unions, with the intention it will be supported by all.

Naturellement. So these giant, global centres of support to the coal-face will be working a 35 hour week and absent for the whole of August.

3. Holding re-centered on strategic functions; Human Resources and Corporate Social Responsibility which lies at the heart of Total’s Ambition

People & Social Responsibility This division will consist of Human Resources; Health, Safety & Environment, which will combine all Segment central HSE departments in order to deploy a strong, uniform environmental and safety model; the Security Division; and a new Civil Society Engagement Division, which will manage all of Total’s initiatives in this area. The Senior Vice President, People & Social Responsibility, will be a member of the Executive Committee.

Rejigging the corporate overheads with additional expenditure on the stuff that Social Justice Warriors like.

The new organization will underpin an even more efficient Total, one that also listens and welcomes dialogue with its customers and stakeholders. Our teams make Total who we are today and will shape who we will be tomorrow — a leading energy player. They are the architects of our success, which is why Human Resources and Civil Society Engagement are cornerstones of this project and will be represented on the Executive Committee.

I am dearly hoping the remaining cornerstones include profitability. Civil Society Engagement sounds wonderful, but it’s not quite the same as a nice, fat, monthly dividend cheque.

If I were to be deeply cynical – and I am – I would say that the oil price crash has revealed that Total has major structural issues that it cannot address due to a combination of French politics and a senior management who has no idea where to begin. Patrick Pouyanne, being well-versed in French politics, is therefore attempting to position the company such that it is viewed as an integral part of a green, sustainable, responsible French societal landscape whereby what is good for Total is also good for France and the rest of the world. Then when the time comes for Total to beg the government for French taxpayers’ cash or state favours, as seemingly every other large French industry eventually does, it will be all the more easy to justify.

I guess running a good, old-fashioned oil company while turning a profit was all a bit too difficult.

When I was 18 years old and first got my driving license, all the talk among my peers was about insurance costs. When you’re a young male – and by definition a total idiot – car insurance is understandably very high, and you can end up being quoted premiums of $2,000 per year on a $700 car. The standard refrain from the insurance companies was “it’s high because you’re under 21”, and 21 was the magic age at which car insurance suddenly became cheaper.

Only it didn’t. By the time I got to 21 I was still being quoted premiums several times the value of the car, only the line trotted out by the insurance companies had changed slightly: “it’s high because you’re under 25”. When I got to 25 I found I was still being treated as a “young” driver, and the premiums didn’t come down any (although the cars I was driving were considerably better, in that the brakes actually worked, the window didn’t keep falling out, and gaffer tape was not a component of the vehicle’s overall structural integrity). I became aware that the goalposts were being shifted every time I reached a previously-cited milestone, and that I’d be better off ignoring promises of future discounts and just shopping around for the best quote I can get today.

I was reminded of this recently when I was talking to a young engineer who in turn had been talking to what laughably gets called his Career Manager. He was being put under considerable pressure to take a position which was, in short, shit: it was a crap role in a dodgy location and would have put substantial strain on his family. Even the monetary uplift wasn’t that great. One of the levers his management was using to encourage him was the promise that if he took the position better opportunities “might” open up for him “later”, and the company would look upon his decision to go favourably and hinted he would be rewarded in some unspecified manner in the future. Perhaps because he knew I am the most cynical person in the entire oil industry, he came to me for advice.

I told him he ought to ignore any promises or hints of future opportunities, as they are nothing more than empty words spoken to try to get him to do something that may not be in his own interests. He asked whether he could get something in writing, and I said that was a complete waste of time. Modern oil and gas managers are as slippery as hagfish, especially those that end up in an HR-type role. Even in the highly unlikely event these individuals (who are in no position to make such promises) occupy the same position in the company at the time he needs them to make good on their commitments, they will dismiss him with a wave of the hand telling him “things have changed” within 10 seconds of his initial overture. In fact, no they won’t: they’ll simply ignore his emails and not answer his phone calls.

Anyone who’s done 10 years in a large oil company ought to know that genuine career progression is reserved for a handful of favoured sons and daughters who tick all the right boxes in terms of social background, school, nationality, compliance, and above all an ability to brown-tongue the hierarchy. They are the ones for whom opportunities present themselves, doors open, and high-profile positions become available. And they don’t get told to do shit roles in dodgy locations. Sure, they do the dodgy locations, but the roles they get given are good and they are whisked out of the place long before the plebs, who are lectured on the importance of completing a full x-years of an assignment. I told him he ought to understand that these individuals want him to take the position for their benefit, which might not even align with those of the company. They sure as hell aren’t interested in what’s good for him.

My advice was to understand what his own interests were, professionally and personally, in the context of the global oil and gas industry. In doing so, he might well realise that an assignment in some shithole will look good on the CV and boost his prospects for future employment outside the company; that this should dovetail with what his management want him to do is nothing more than a happy coincidence. Alternatively, he might find that it is not in his interests to take the assignment. I gave him as much advice on this topic as I was able.

My point was not that you should disregard the future impact an assignment will have on your career and job prospects, but that the analysis should be carried out based on your criteria and what is good for you, disregarding the self-serving empty promises of people who claim to be managing your career. For they, just like the insurance companies when I was a spotty teenager, are adept at picking up the goalposts and wandering off with them.

In among a series of rather haphazard comments on this post, reader Kale Sid raises a point which is worth discussing further:

the … system that perpetuate mediocrity over excellence in the name of local content allows some nitwit from elsewhere that are not qualified to be painters in their countries to lord themselves around as ” expats”.

Unless I am mistaken, what I think Kale Sid is saying is that countries which have stringent local content laws end up employing useless Western expats. On this point, I can do little but agree wholeheartedly. Where we probably differ, though, is why that is and whether I benefit from this state of affairs.

It is no secret that a hefty proportion of Western expats employed in the oil industries of Africa, South America, Asia, and the former Soviet Union are utterly useless and – in the words of Kale Sid – not fit to paint a wall. A large chunk of these are alcoholic womanisers who are more sex tourists than migrant workers, and it is worth having a look at how these people can find themselves in positions which, in theory, require experienced professionals.

In my experience, the standard of expat one can find in any oil town is related to the following two factors:

1. The general competence and work ethic of the local population.

2. The strength and pervasiveness of prevailing local content legislation.

In places like Aberdeen, Houston, and Stavanger the foreigners are roughly of the same standard as the locals in terms of experience, competence, and general behaviour. This is because the local standards are high and underperforming foreigners would not be tolerated in any great numbers. With companies always preferring to employ a competent local hire over an expatriate all things being equal, the number of truly expatriate positions in these places are relatively few (most foreigners are on local contracts, or they are secondees of international firms on assignment for professional reasons: rarely are foreigners required to bring in technical expertise).

In places like Russia, Kazakhstan, Brazil, and Indonesia the local standards are lower and as such the requirement for expatriate expertise and competence is higher. Local content laws are also more stringent, both in terms of employees that must be hired and company ownership. In line with what I said above, the standard of expatriate is somewhat lower but there are plenty of good ones to be found.

In places like Africa and the Middle East, the local standards range from low to extremely low and they are highly dependent on an expatriate workforce to get anything done. Because of this, local content legislation is very strong and companies are forced to take on large numbers of locals and use locally-owned companies (Africa) or route all their operations through a local sponsor (the Middle East). The standard of expat in these places tends to be lower still, and in many instances can be embarrassingly bad.

The root cause of a country finding itself infested with poor-quality expats can be found by looking at why they need expats in the first place. Usually this is because the country is simply badly governed, and has been for a long time: competence, hard work, initiative, and transparency are not rewarded and personal progress (e.g. wealth, status, recognition) is achieved via family connections, tribalism, corruption, dishonesty, and violence. The more this is the case the more a country will need foreign workers to get anything done.

The trouble is, if the criteria for individual success in any given country lead to the wrong outcomes overall, it is unlikely different criteria will be applied when it comes to inviting in foreign companies and hiring foreign workers. Those charged with drawing up and enforcing local content legislation not only hijack the system to enrich themselves, but they are also completely unable to judge whether a company or individual meets any kind of international standard. If bribery and toadying behaviour are rewarded among the locals, why would anyone think hard work and transparency are appreciated in foreigners?

The results of this are severe. Hardworking, competent, and honest locals find themselves working alongside and reporting to useless, bone-idle, and exceptionally dim compatriots, and those that can leave to work in an environment more appreciative of their abilities, i.e. the West. This reduces the numbers of much-needed competent locals, and ensures the upper ranks are stuffed full of mediocrity and incompetence. The more competent expats learn to avoid certain countries and companies, or demand sky-high salaries to work there. If the job market is booming, even handsome day-rates can’t attract enough of them. This results in expatriate positions being filled with people who may struggle to get a job elsewhere, or are there for completely the wrong reasons (which range from dodging alimony or the taxman to getting cheap pussy. And don’t for one minute be fooled into thinking that this does not apply to senior managers in very well known international companies, either). The locals have little or no idea how to differentiate between a useless expat and a good one, and usually congratulate themselves on being able to find somebody calling himself an engineer who only wants $300 per day instead of the $700 that the other candidates wanted.

At the extreme end of the scale one finds that even the most useless expat can outperform most locals, as regular commenter Adam points out rather bluntly here. But in most places, even in the very worst, you still get useless expatriates being outperformed by locals who are on a fraction of their salary. This, in my opinion, has been a major failing of foreign companies in the developing world, and will probably do more long-term harm than any other policy they have adopted (the reasons they continue to assign such people is, as in the host country, the criteria for success in their own organisations are equally warped).

I suppose if I was from a complete basketcase and my countrymen unable to run a whelk-stall, I would grudgingly admit we needed foreign help from people who would turn up, live like kings, and take off with the local womenfolk. But the flip side of the deal is that these foreigners had better be an order of magnitude better than what can be found locally, or I think I’d be looking to join a guerrilla movement: I can’t think of anything more humiliating than being told what to do in my own country by a useless, incompetent foreigner who has been hired specifically because he supposedly knows better. I’ve seen locals in this situation, and I admire their restraint. It is appalling, and Kale Sid is right to point it out, and he is also to be commended for noticing the connection between this and local content laws.

That said, he made the assumption that I, by virtue of my being an expat, must therefore benefit from this. This implies that I am a useless expat, and I might well be, but it should not be assumed that professional expatriates benefit in any way from countries and companies which cannot see beyond the white face to judge competence. They would rather see the back of the charlatans which infest the oil industry and depress standards and salaries for the rest. Kale Sid’s remarks implied that he or she thinks all expatriates are useless, which is quite simply wrong.

So my advice to Kale Sid and others like him would be to quit doing what his compatriots have been doing for years – judging people by their pasty face and/or passport – and put themselves in a position where they can recognise genuine competence and evaluate which people are adding value and which are not. They can then lobby their own management, hierarchy, policy makers, and governments to ensure that people who are not fit to paint a wall are not employed in their country. It might be a tough task, but that’s the only solution I can see.

Barry Morgan, writing on the proposed reforms to Nigeria’s oil industry in Upstream Online, manages to get in a wonderful snark at the end of his article:

Minister of State for Petroleum Resources Ibe Kachikwu, who doubles as Nigerian National Petroleum Corporation (NNPC) group managing director, will over the coming days lay out plans to split the state company into 30 standalone units before a proposed initial public offering in 2018. After four decades, the NNPC is clearly in a bit of a mess, haemorrhaging $1.3 billion last year alone.

…

Petroleum & Natural Gas Senior Staff Association of Nigeria general secretary Lumumba Okugbawa has hit out at the reform plan as “a display of arbitrariness”, that is riding roughshod over enabling laws that created the NNPC and trashing the long-delayed Petroleum Industry Bill.

Sounds like an effective strategy.

When it comes to the Nigerian oil industry, it is a useful rule of thumb that if the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is complaining about something then that something is invariably good for the Nigerian oil industry and the majority of Nigerians.

Nigeria’s state-owned oil company has failed to pay the government $16bn (£11bn) in a suspected fraud, according to an official audit.

The Nigerian National Petroleum Corporation (NNPC) provided no explanation for the missing funds, the auditor general told MPs.

This finding by the auditor general, while shocking, is not a surprise.

Officials from the previous administration allegedly indulged in wholesale corruption where billions of dollars of oil funds simply disappeared.

At which point long-serving observers of Nigerian politics stifle a yawn and return to playing Minesweeper.

Nigeria’s oil reserves should have been blessing for Nigeria to be used to build infrastructure and invest in social services.

Instead, it has been a curse, a lubricant that has produced massive corruption and dysfunctional governments.

And, of course, an enormous source of wealth, privilege, and influence for the tiny number of Nigerians who happen to be PENGASSAN members at the expense of tens of millions of ordinary Nigerians.

I was reminded of PENGASSAN, and their role in expanding Nigeria’s disastrous local content laws, when I read this article on ships choosing to take the longer route around the Cape of Good Hope rather than transit through the Suez canal:

Shipping firms pay what amounts to several billion dollars every year to the Suez Canal Authority, an Egyptian state-owned entity, for the privilege of travelling via the canal.

…

However, more and more some ships are deciding not to take the Suez route. Instead, they are travelling around the Cape of Good Hope, right at the southern tip of Africa.

…

There are other costs, too. Rose George, author of Deep Sea and Foreign Going, was on board a ship using the Canal a few years ago. She notes that vessels must agree to taking on a Suez crew for the transit.

“[The Suez crew] seem to do nothing but listen to tinny radio and try to sell souvenirs,” says George, adding the ships often have to pay a cigarette ‘tax’.

“On each voyage, Suez costs a ship about £400 ($560) of cigarettes, as well as dozens of chocolate bars from the bond locker.”

Laziness and theft resulting from local content legislation? Who would have thunk it? Only I can’t help thinking the shipping companies are getting off lightly: if the idiots at PENGASSAN were running the canal, they’d insist on their own incompetent members taking the wheel and command of the ship itself right up to the home port where they would demand hotel accommodation for a week before being flown home with an excess baggage allowance of 150kg per person. And if they crashed into Gibraltar and sent the ship to the bottom, they’d demand a meeting with the company heads and, foaming at the mouth, bemoan their lack of training while ignoring the millions of dollars spent on just that.

Let’s hope Nigeria’s president Buhari takes to NNPC with a flamethrower before turning his sights on PENGASSAN.

Today, March 8th, is International Women’s Day and as such I received a company-wide email from the bowels of HR telling me I should respect women for the job they do. Which I thought I already did, but obviously not.

I met up for lunch with a former colleague of mine who now works for another company, an intelligent, pleasant, and competent female engineer. In the morning she had been called together with other female engineers in her office by one of the high-flying engineering managers, also a woman. The manager announced that female engineers made up “only” 11% of all engineers in the company and they were looking to increase that to 30%. My colleague, to her credit, told me she wasn’t very happy about this.

She was right to be unhappy. For whatever reason, few women study Mechanical, Civil, and Electrical Engineering compared to men. As such, oil companies don’t have as many female engineers in the pool of graduates from which to draw recruits from. Now it might well be that an overarching patriarchy or misogynistic practices dissuade bright young women from studying engineering, but one would be hard pressed to explain why Chemical Engineering degrees see far more women participants than the other engineering disciplines. And this explains why in Process Engineering (and the related discipline of Safety Engineering) one finds plenty of women. If there is a patriarchy preventing women from becoming well-paid and successful engineers, they’ve overlooked the Process department.

My position on this is that in 2016 women are fully informed as to the degree choices on offer and they select a course according to their own personal preferences. For whatever reason, women choose biological sciences, law, medicine, and chemical engineering more than they do mechanical, civil, and electrical engineering. So if an oil company is selecting engineers, the recruitment pool will contain more men than women and hence more men will be recruited than women. And it’s as simple as that.

As such, the attempts of companies to achieve arbitrary percentage targets of female engineers are completely wrong-headed. I understand that Norway is the leader in attempting to achieve a 50:50 split of male to female engineers, and as such any female engineer who graduates is guaranteed a job (due to the scarcity of female engineering graduates) no matter how dim she is, at the expense of possibly much brighter and more deserving men. It also does a huge disservice to those many female engineers who are more than capable of holding their own in the company of their male colleagues, as people may – and do – assume they are there simply because they are female. Competent female engineers don’t need the assistance of arbitrary quotas to succeed.

That said – and this occurred to me during the discussion with my friend over lunch – female engineers probably are discriminated against in terms of career progression and promotion, only not in the way that a company HR department would acknowledge even if it was pointed out to them. I have argued as long as this blog has been running, and for a few decades before, that promotion in the modern oil industry – particularly in oil companies – is done in part by a combination of craven arselicking of the senior managers and sheep-like compliance with every request or initiative from on high no matter how stupid (also required is a willingness to backstab your colleagues and shit all over your subordinates, but I’ll leave them aside because women are as good at these as men, if not better). The formal term given to the toadying behaviour expected of those who desire a career in an oil company is “networking”, which falsely implies that you are merely getting to know useful people at all levels of the organisation. Networking, when used in the context of it being essential for your career progression, means worming your way into a superior’s good books such that he or she will put in a good word for you with other managers in return for not having had to spend hard-earned cash on Andrex for the last few years. This “networking” normally takes the form of lunches, coffees, office chats, and socialising between those with career ambitions and the superiors who hold they keys to their success, and anyone who doesn’t engage in these activities can forget about getting a promotion ahead of someone that does. Merely being experienced, competent, conscientious, accurate, dependable, and pleasant counts for absolutely nothing if one isn’t prepared to fellate, flatter, and felch the hierarchy in the course of chasing a decent position. It is important to note at this point that a subordinate who has the full support of his hierarchy must be seen in their eyes as harmless, and no threat to those above him or their interests. Very important.

When I think about it, looking back – a glance around the canteen, a walk through the corridors peeping sideways into the offices, a survey of who is talking with whom at a company function, the people working unnecessarily late – it is almost always men networking with other men, or groups consisting mainly of men with one or two women. Rarely do you see an all-female group, or a mainly-female group, stood in a circle around a superior fighting each other to make the best impression. Women, when they speak amongst one another, rarely do so in a group larger than three or four. You’ll see the occasional woman outmanoeuvre the men in a mixed group, but it appears to my untrained eye that men are a lot better at the self-depreciating remarks, insincere laughter, and other social tricks which serve to render them harmless in the eyes of a superior than women are. In the course of courtship men often find themselves playing the role of a harmless buffoon, believing that being seen as no threat will help get them laid (hint: it won’t). But how often do you see women playing the role of harmless buffoon? Never. Some women might flatter a male superior in order to manipulate him sexually, but rarely in a manner which makes her appear craven, malleable, and of lower value. In fact, women who are trying to get ahead tend to come across as quite the opposite of harmless, i.e. fucking dangerous!

So my theory is that female engineers are not as willing or able as their male counterparts to put in the weeks and months of toadying behaviour in order to generate the impression they are obedient, docile, and of no threat whatsoever in the eyes of their hierarchy, especially if the superiors in question are male. Therefore, when the coveted positions come up, it is mainly the men who have the bosses putting in a good word on their behalf.

The solution to this problem is simple, and doesn’t involve idiotic, arbitrary quotas of female engineers: stop promoting people based on their being craven arselickers, and start promoting people based on competence and timely, accurate delivery. Then women could compete freely with men and the best positions would go to the most deserving of either sex. What’s more, the beauty of this solution is that it will be of great benefit to the entire industry even if my theory is totally and utterly wrong!